Review of the Energy Market Investigation (Prepayment Charge Restriction) Order 2016

The CMA has published its final decision in its review of the Energy Market Investigation (Prepayment Charge Restriction) Order 2016

From:
Competition and Markets Authority
Published
31 January 2019
Last updated
31 July 2019 — See all updates
Case type:
Reviews of orders and undertakings
Case state:
Closed
Market sector:
Energy, Utilities
Opened:
31 January 2019

Case timetable

Date Action
31 July 2019 Publish final decision
7 June 2019 Publish and consult on provisional decision (when changes to an order are proposed, the CMA is required to carry out a 30 day consultation period)
Spring / Early Summer 2019 Evidence gathering and issues statement consultation
31 January 2019 Review launched and initial request for evidence

Published in line with the guidance on the Competition and Markets Authority’s (CMA) approach to the variation and termination of merger monopoly and market undertakings and orders. Any revisions made to the timetable will be published on this webpage.

Final decision

31 July 2019: The CMA has today published its final decision to adopt an adjusted version of the methodology used for Ofgem’s default tariff price cap in order to keep the PCR accurate in today’s market. The CMA has also recommended that Ofgem should continue to protect prepayment customers once the CMA’s cap expires in 2020.

Responses to the provisional decision

31 July 2019: The CMA has published non-confidential versions of interested parties’ responses to the CMA’s provisional decision.

Provisional decision

7 June 2019: The CMA has today published its provisional decision to adjust the methodology used to calculate its prepayment price cap in order to better reflect costs. It has also made a provisional recommendation to Ofgem to extend protection to prepayment customers beyond the end of 2020, because of the delayed roll-out of smart meters.The CMA is seeking comments on its provisional decision to vary the Order, and on the draft Variation Order, the draft Explanatory Note and the model that would replace the CMA’s original prepayment price cap model. The CMA will consider the comments and evidence provided before reaching its final decision.

Those who wish to respond should provide their views, supported with relevant evidence where possible, in writing to the CMA either by email or by post to the address given below by 5pm on Monday 8 July 2019.

Responses to issues statement

7 June 2019: The CMA has published non-confidential versions of interested parties’ responses to the CMA’s Issues Statement:

Responses to invitation to comment

19 February 2019: The CMA published non-confidential versions of interested parties’ responses to the CMA’s initial invitation to comment:

Issues statement

19 February 2019: The CMA published an issues statement. This document sets out the evidence available to the CMA, and matters on which it would be grateful to receive evidence, and the potential outcomes of the review. The CMA seeks interested parties’ views on these.

Any interested parties who wish to respond should provide their views, supported with relevant evidence where possible, in writing to the CMA at the contact details below by 5pm on 15 March 2019. Responses to the invitation to comment on the proposed review published on 18 December 2018, and the launch document published on 31 January 2019, will be taken into account when reviewing submissions in response to this statement of issues.

Review group appointed

6 February 2019: The CMA appointed the following panel group members to the Review of the Energy Market Investigation (Prepayment Charge Restriction) Order 2016.

Kip Meek (Chair), Paul Muysert and Claire Whyley.

Decision to carry out a review

31 January 2019: Following an invitation to comment (published on 21 December 2018) and having taken into account the views of a number of interested parties, the CMA has decided to review the Energy Market Investigation (Prepayment Charge Restriction) Order 2016.

The review will consider whether a change of circumstances has occurred such that a revocation or variation of the order would be appropriate. Following receipt of comments from interested parties, the scope of the review has been widened beyond that described in the invitation to comment.

The scope of the review will now include:

a) The speed and scale of smart meter roll-out and the expected number of smart meters expected to be installed by the end of 2020.

b) The introduction by GEMA of a charge restriction for customers on default tariffs, taking into consideration the risk of unintended consequences on competition, consumers and the smart meter rollout arising from the coexistence in the retail energy markets of 2 charge restrictions with different methodologies and underlying data.

The CMA is seeking comments on whether a change of circumstances has occurred, and if so, whether the Order should be varied or revoked. The CMA will use the comments and evidence provided to inform a provisional decision which will be published for consultation. Those who wish to respond should provide their views, supported with relevant evidence where possible, in writing to the CMA either by email or by post by 5pm on Friday 22 February 2019.

Contact

Energy Prepayment Review
Competition and Markets Authority
RBFA – 6th Floor South East
Victoria House
37 Southampton Row
London
WC1B 4AD

remedies.reviews@cma.gov.uk

Published 31 January 2019
Last updated 31 July 2019 + show all updates

  1. Published: final decision for the review of the Energy Market Investigation (Prepayment Charge Restriction) Order 2016.

  2. Provisional decision and responses to issues statement published.

  3. The issues statement and responses to the initial invitation to comment have been published.

  4. Review group appointed.

  5. First published.

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